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Counterterrorism: A Game-Theoretic Analysis

Daniel G. Arce M. and Todd Sandler
The Journal of Conflict Resolution
Vol. 49, No. 2, The Political Economy of Transnational Terrorism (Apr., 2005), pp. 183-200
Published by: Sage Publications, Inc.
Stable URL: http://www.jstor.org/stable/30045107
Page Count: 18
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Counterterrorism: A Game-Theoretic Analysis
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Abstract

This article establishes the prevalence of deterrence over preemption when targeted governments can choose between either policies or employ both. There is a similar proclivity to favor defensive counter-terrorist measures over proactive policies. Unfortunately, this predisposition results in an equilibrium with socially inferior payoffs when compared with proactive responses. Proactive policies tend to provide purely public benefits to all potential targets and are usually undersupplied, whereas defensive policies tend to yield a strong share of provider-specific benefits and are often oversupplied. When terrorists direct a disproportionate number of attacks at one government, its reliance on defensive measures can disappear. Ironically, terrorists can assist governments in addressing coordination dilemmas associated with some antiterrorist policies by targeting some countries more often than others.

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